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US stocks jump 2% after recent sell-off; the yen falls against the dollar

  • S&P 500 closes over 2%
  • US Treasury Yields Rise
  • The yen plunges against the dollar
  • Crude Oil Settles Higher

NEW YORK, June 21 (Reuters) – Shares on global indices rose sharply on Tuesday, with major U.S. stock indexes each ending up more than 2% after a recent selloff, while the Japanese yen fell against the dollar US to its lowest level since October. 1998.

Wall Street soared as participants returned from a long weekend, with investors buying growth stocks in megacaps and energy companies hit last week by global economic concerns. Read more

Energy shares rose along with oil prices. Oil gained on strong summer fuel demand. Read more

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“After consecutive weeks of 5% declines, you’ve pushed the ball underwater enough now that we’re getting a rebound,” said Paul Nolte, portfolio manager at Kingsview Investment Management in Chicago.

But, Nolte said, “interest rates keep going up. Oil keeps going up.”

Expectations of interest rate hikes from major central banks and fears of a global recession kept investors on edge. Central banks should tighten their policies to fight against high inflation.

The Dow Jones Industrial Average (.DJI) rose 641.47 points, or 2.15%, to 30,530.25, the S&P 500 (.SPX) gained 89.95 points, or 2.45%, to 3,764.79 and the Nasdaq Composite (.IXIC) added 270.95 points, or 2.51%, to 11,069.30.

The pan-European STOXX 600 index (.STOXX) rose 0.35% and the MSCI gauge of stocks across the world (.MIWD00000PUS) gained 1.83%.

Yields on US Treasuries rose as the risk aversion mode that weighed on US markets last week took a break.

Benchmark 10-year yields were at 3.305%, up from their close of 3.239% at the end of last week.

All eyes are now on Fed Chairman Jerome Powell’s testimony before the Senate Banking Committee on Wednesday for clues on rates.

Goldman Sachs said it now believes there is a 30% chance the US economy will tip into a recession within the next year, up from its previous forecast of 15%. Read more

In the foreign exchange market, the Japanese yen plunged against the US dollar to 136.330 to the dollar. Read more

Japanese Prime Minister Fumio Kishida said the central bank should maintain its current ultra-loose monetary policy. This makes it an outlier among other major central banks. Read more

Brent crude futures rose 52 cents, or 0.5%, to settle at $114.65 a barrel. The US West Texas Intermediate (WTI) crude contract for July expired on Tuesday, closing at $110.65, with a gain of $1.09, or 1%. The most active August contract rose $1.53 to $109.52.

Spot gold fell 0.3% to $1,832.27 an ounce.

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Additional reporting by Elizabeth Howcroft in London; also by Devik Jain and Anisha Sircar; Editing by Louise Heavens, Chizu Nomiyama, Will Dunham and Mark Heinrich

Our standards: The Thomson Reuters Trust Principles.